@TechReport{iza:izadps:dp17587,
            	author={Herget, Anna and Riphahn, Regina T.},
            	title={Phasing Out Payroll Tax Subsidies},
            	year={2024},
	month={Dec},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={17587},
            	url={https://www.iza.org/index.php/publications/dp17587},
	abstract={Many countries subsidize low-income employments or small jobs. These subsidies and their phasing out can generate labor market frictions and distort incentives. The German Minijob program subsidizes low-income jobs. It generates a 'Minijob trap' with substantial bunching along the earnings distribution. Since 2003, the newly introduced Midijob subsidy aims to reduce the Minijob-induced notch in the net earnings distribution. Midijobs reduce payroll taxes for employments above the Minijob earnings ceiling. We investigate whether introducing Midijobs reduced the Minijob trap. We apply a regression discontinuity design using administrative data and a difference-in-differences estimation using survey data. While in both cases our results show a small positive overall effect of Midijobs on transitions out of Minijobs, they are effective only for a narrow treatment group.},
	keywords={regression discontinuity;difference-in-differences;causal effects;payroll tax subsidy;Minijobs;Midijobs;SOEP;SIAB},
            }